Insurance coverage is well worth the money if you ever have an accident or run into another situation where you have a large financial need. However, seeing your rates go up can still feel frustrating. Insurance rates are determined by many different factors. Your age, driving record, and other personal characteristics are all carefully considered before you’re given a quote. Watching out for these six reasons for your rates to increase helps you be prepared when you get a quote or receive a renewal statement.
1. You Have a Low Credit Score
Credit scores fluctuate over time. Insurance companies use your credit score to determine your ability to pay on time. They may also use the score to assess your general level of responsibility. Someone who pays his or her bills on time is less likely to make risky decisions. If your score has decreased, this could explain the higher rates. Getting your score back into the good zone can help you get lower rates in the future.
2. Your Zip Code Changes
If you’ve recently moved, you might see your rates increase. This is especially true if you moved to an urban or highly populated area. Insurance companies know accidents are more likely to happen when more people are on the streets. This could also impact your rates if you moved to an area known for having high crime rates that involve damage to homes or vehicles. Zip codes that are at risk for natural disasters can also have higher homeowners insurance rates.
3. You Increase Your Yearly Mileage
You might not have driven much when you got your first auto insurance policy. Now, you might be traveling for work or simply have a longer daily commute. Insurance companies consider more time on the road to be a risk factor for accidents. Typically, this rate increase is fairly minimal, but it might be noticeable if you drive extremely long distances.
4. You’ve Had Your Policy for a Long Time
Insurance rates naturally increase with the rate of inflation. However, there are some instances that make them increase faster. For instance, your neighborhood might have just had a major population explosion, or there may be new hazards in the environment. Insurance companies tend to have standard rates for certain areas, and yours may be different if your community has changed substantially.
5. You Add a Male to Your Policy
Gender discrimination is wrong in most cases, but insurance companies are legally allowed to make rate adjustments according to whether you’re male or female. This is because insurance rates are often determined by your risk factors. Men under the age of 25 tend to have the highest rates. The good news is this tends to even out once males hit their 30s.
6. You Just Bought a New Car
Your old trustworthy four-door vehicle with safety features is going to cost less to insure than a brand-new two-door sports car with a powerful engine. The type of car you own matters when it comes to rates. If insurance costs are a major concern, it’s often worth giving your company a call to get an estimate before you buy a new vehicle.
Understanding how the factors listed above affect your insurance rates can help you plan so you can save money on your insurance costs. For reliable, affordable insurance, San Diego homeowners know they can trust Altra Insurance Services. We provide homeowners, renters, commercial, motorcycle, and car insurance. Request a free quote by calling one of our friendly agents today at (800) 719-9972.